Posted December 12, 20231 yr The Land Tax VS Real Estate Tax Debate It’s a hot topic in the economics world: Would it be fairer and better public policy if we were to tax just the land on which buildings sit instead of the land and all the improvements as well? Proponents of the land-value tax argue for what they see as its obvious benefits: A land tax would be fairer to lower-income property owners because they pay a greater percentage of their income for housing. By taxing land and not buildings you’d encourage development of vacant, blighted properties not by taxing their development, but instead by creating a disincentive to leave them dormant. Overall real estate values are prone to bubbles and other heavy swings due to market inefficiencies, while land values are more stable. Therefore, taxing only land would give government officials greater predictability when they budget. In real-world Detroit, the city government is asking the state legislature to allow it to put a partial land value tax to a vote next year. It would cut taxes on buildings by $14 for every $1,000 of assessed value, while more than doubling land taxes. More below: https://columbusunderground.com/the-land-tax-vs-real-estate-tax-debate-ocj1/ "You don't just walk into a bar and mix it up by calling a girl fat" - buildingcincinnati speaking about new forumers
December 12, 20231 yr well for one thing, land taxes would be a heck of a lot easier for city's to assess and harder for trumpian type real estate players to pull shenanigans on.
December 12, 20231 yr Incidentally, Adam Smith argued for this as the preferred mode of taxation in The Wealth of Nations. The fact that one of the founding fathers of modern economics proposed this the same year America was founded, and yet almost no taxing authority at any level capable of imposing property taxes has adopted it, probably says something about the difference between its economic merits and political feasibility.
December 12, 20231 yr 2 hours ago, ColDayMan said: The Land Tax VS Real Estate Tax Debate It’s a hot topic in the economics world: Would it be fairer and better public policy if we were to tax just the land on which buildings sit instead of the land and all the improvements as well? Yes. The answer is yes. Thank you, Henry George. When is the last time I-71 turned a profit?
December 12, 20231 yr 2 hours ago, Gramarye said: Incidentally, Adam Smith argued for this as the preferred mode of taxation in The Wealth of Nations. The fact that one of the founding fathers of modern economics proposed this the same year America was founded, and yet almost no taxing authority at any level capable of imposing property taxes has adopted it, probably says something about the difference between its economic merits and political feasibility. https://www.chicagofed.org/publications/chicago-fed-letter/2023/489
December 12, 20231 yr Interesting idea. If this helps discourage the practice of buying up older buildings in historic neighborhoods, leaving them vacant while they rot (destroying so much in Cincinnati and elsewhere) I am all for it. Maybe it makes turning downtown building into surface parking lots uneconomical as well. Would this potentially encourage density as well? Edited December 12, 20231 yr by mrCharlie
December 12, 20231 yr 4 minutes ago, mrCharlie said: Interesting idea. If this helps discourage the practice of buying up older buildings in historic neighborhoods, leaving them vacant while they rot (destroying so much in Cincinnati and elsewhere) I am all for it. Maybe it makes turning downtown building into surface parking lots uneconomical as well. Would this potentially encourage density as well? That's absolutely part of the argument about the incentives involved. The property tax would be the same for 1 acre of land in an urban core whether it was a surface parking lot, a single-family home, a 10-story residential tower, or a factory. (Things would get a bit more complicated when dealing with issues like nonprofit ownership.) Another significant part of the argument is that while the owner's use of the land would be irrelevant to its value for tax purposes, the government's development and management of the surrounding area absolutely would matter. So 100 acres in the heart of Cleveland absolutely would be taxed much more highly than 100 acres in Pike County, because the infrastructure development there means that the land itself (the basis for taxation) is more valuable, because there's so much more you can do with it. Things get slightly more complicated when considering human factors on the environment of the land beyond infrastructure development, i.e., crime as an influence on property value, and also legal environmental factors like zoning (i.e., land is less valuable if you cannot put a big, valuable building on it, more valuable if you can, and somewhere in between if you need a complicated variance to do so).
December 12, 20231 yr 3 hours ago, Gramarye said: The fact that one of the founding fathers of modern economics proposed this the same year America was founded, and yet almost no taxing authority at any level capable of imposing property taxes has adopted it, probably says something about the difference between its economic merits and political feasibility. Almost-no taxing authority Pittsburgh had a land value tax for a long time -- 1913 to 2001. But Pittsburgh failed to continue to reassess land values over time, probably because of the political benefits of giving wealthy landowners a break. Eventually it caught up to them, and when they tried to revalue the land at its "current" market value it was such a big increase that there was a revolt. Pittsburgh may still be using a land value tax for their CBD, however, which seems to be doing as well as or better than Cleveland's. https://www.governing.com/archive/gov-land-tax.html
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